Myth No. 2: True transformation is a blue chip’s journey
The reality is real transformation comes from disruptors that do not have large market share, says Stephen Andriole, a professor of business technology at Villanova University’s School of Business.
There is still a lot of ignorance surrounding what digital transformation is, based on Villanova data, he says. Some respondents thought it was the equivalent of installing a new ERP system, he says. Consequently, large corporations think they dominate their industries simply because they have been successful in the past, says Andriole, noting that “Marriott could have done AirBnB. But they didn’t.”
Other startups, like Amazon, Uber and Netflix, among others, have found tremendous success over traditional players in their respective industries, he points out. However, established companies like Starbucks are also staying competitive because they are always looking at their processes and experimenting with their stores, Andriole says.
“They’re very innovative and looking at their processes and making adjustments to improve those processes,’’ he says. “They’re one of the first, I believe, to do cashless transactions because they want them to go faster and sell more stuff. … You think making coffee is simple, but it’s not.”
Most companies do not take the time to figure out their business processes or create active process maps, he says. It’s only when they are losing market share, or an executive becomes worried about receiving a smaller bonus — or fears being fired — that they become willing to try new things.
Over 70 percent of respondents to a 2016 Villanova survey who expressed interest in data transformation said they did not have active process maps, according to Andriole. “People tend to not talk about data transformation and business process management (BPM) in the same breath,’’ he says.
When organizations don’t have a full inventory of their business processes, they are unable to answer questions like how do you cross sell and how do you innovate, Andriole says. A process is broken, he adds, when it is not open and agile.
He cites the time he was interim global CIO at pharmaceutical company Shire from 2010 to 2011, as an example. Andriole began looking at BPM and discovered that many processes, like supply chain planning, were broken.
“But the stock was rising, and not too many managers and executives who owned the broken processes were — understandably — all that interested in shining bright lights on problems in their house,” he notes. “Why call attention to problems when everyone’s making money?”
The stock continued to rise, so the appetite for process transformation remained low, he says. More recently, though, the stock has fallen and the need for digital transformation and other steps, is now obvious, he says.
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